Measuring the mayor MAINBAR

Four years ago, Rahm Emanuel stood in a packed school gym on the North Side and announced that he would run for mayor of the city he loves because its leaders could no longer avoid making difficult decisions.

“The choices we make in the next few years will define Chicago for future generations,” he declared. “They will determine whether we remain a world-class city—or fall back.”

Four years later, Mr. Emanuel, now 54, is seeking a second term with the pitch that he has done just that—tackling underfunded worker pensions, establishing a longer school day, cutting wasteful spending, slashing red tape and finding the money to revitalize public transit. “We have laid a foundation,” he says in a recent interview in his City Hall office. “We are farther along getting to the other side than we are to going back to our bad set of practices.”

But how far is that? How much has Chicago's flinty-eyed Energizer bunny of a mayor actually moved the city?

The answer: More than some may think, but not as far as Mr. Emanuel would like, hobbled in part by his own polarizing style.

To assess Mr. Emanuel's progress, Crain's studied a wide range of data about the city's performance under this mayor, examining population, crime and employment figures, and zoning in on pension, debt and other financial measures.

What we found is a mixed record, with some clear successes, a few disappointments and a plethora of incompletes. As Mr. Emanuel himself admits, the job of turning around Chicago is far from done.

Growth in city spending has eased and a crucial first step was taken to avoid a pension crisis that could explode the city's budget. Employment is growing, small businesses face somewhat fewer hassles and graduation rates are up at Chicago Public Schools and City Colleges. Mr. Emanuel has used his cachet as a former presidential chief of staff to lure corporate headquarters and tech entrepreneurs, as well as the new Lucas Museum of Narrative Art.

But that job growth only now is gaining traction. Mr. Emanuel has benefited from back-to-the-city trends and school reforms that predate his tenure. The reality of governing a Rust Belt city with an aging infrastructure has forced him to scramble, even as the murder rate soared in 2012 and debt continued to rise, albeit more slowly than it did under Mayor Richard M. Daley.

Those trends mean Mr. Emanuel has a ways to go in tackling his toughest test, extending the growth and prosperity of the central city and North Side to mostly minority neighborhoods to the south and west—a challenge that also bedeviled Mr. Daley. “There are two Chicagos,” one former Emanuel aide sighs. “Until we're one, Chicago is not back.”

Chicago has gained jobs every year since Mr. Emanuel took office, largely propelled by a vibrant downtown. Overall, Chicago has gained 43,000 full-time positions since 2010, to total 1.4 million, according to the Chicago Metropolitan Agency for Planning. That 3.2 percent gain trails a 5.2 percent increase in the suburbs, but state data show the city adding even more jobs than the CMAP data: 30,170 more this year through September.

The city's retail sales growth continues to outpace the suburbs', up 17.4 percent versus 13.7 percent since 2010. The demand for office space is up, too, with 2.1 million square feet downtown leased over the past three years, according to commercial real estate firm CBRE Inc., ranking Chicago seventh of the 10 largest U.S. central business districts. Median household income in 2013 was near its pre-recession peak, with the recovery here seventh of the 10 largest cities.

Mr. Emanuel has strongly pushed tourism as a driver of employment for those who lack college degrees and touts a 23 percent jump since he took office, to nearly 48.5 million visitors in 2013. His focus has been big-spending international tourists. Their numbers grew 21.5 percent in the past three years, but Chicago's share of the U.S. total remains unchanged at 4.3 percent.

The mayor has had some success in a related move—to make the McCormick Place convention center, along with nearby Bronzeville, into a growth magnet for the mid-South Side. He has pushed new hotels and a sports arena, invested $50 million in a new Green Line el stop and helped lure the Lucas museum, which will be located nearby. Such moves are spurring job growth, he says. But subsidies for the arena, whose major tenant will be DePaul University's men's basketball team, have sparked controversy, and plans for the vacant Michael Reese Hospital site nearby remain vague.

Without controversy are his moves to bolster Chicago as a tech center, the home of big companies like Groupon Inc. and Braintree, and the 1871 incubator at the Merchandise Mart. “The overall environment has materially changed and improved since he assumed office,” 1871 chief Howard Tullman says.

Another plus: Much more than Mr. Daley, this mayor has focused on public transit. As he puts it, “What companies want is their employees to get to and from work with a convenience that doesn't exist in Seattle, that doesn't exist in San Francisco. We have something that is a huge, huge economic driver.”

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Police investigators work at a crime scene on North Orleans St. in the early hours of Aug. 3, 2014. At least two people were killed and 22 others wounded in Chicago over that weekend. Newscom photo

CRIME

If there's one subject that has kept Mr. Emanuel and his team up at night, it's the city's murder rate, which spiked to international attention in 2012 but since has ebbed.

The good news is that the mayor is correct when he says overall violent crime is down. Between 2010 and 2013, the number of reported violent crimes dropped by a quarter, to 24,431 from 30,676. Through Oct. 5 of this year, shooting incidents are up 6 percent, but the number of murders is down 7 percent, hitting rates the city has not seen since the 1960s.

Memories remain, however, of the hellish 2012, as well as high-profile cases since then, such as the 2013 murder of 15-year-old Hadiya Pendleton just a mile from President Barack Obama's Kenwood home. Perhaps more significant, the gap has closed only slightly between high-crime areas on the South and West sides and relatively low-crime areas on the North and Northwest sides.

According to Crain's analysis, a resident of police districts with the highest rate of violent crimes was 6.7 times more likely to be the victim of a violent crime than one who lived in the lowest-crime districts in 2010. By 2013, that ratio dropped slightly to nearly 6.0. But through Oct. 15, the ratio rose back to 6.7. The ratio for murders alone is even higher, with residents of some districts 15 times more likely to be killed than those who live in low-crime areas.

The mayor makes no apologies for not hiring more police, despite repeated criticism. Overtime is cheaper—even at an annual cost of $100 million-plus—and provides Superintendent Garry McCarthy with more boots on the ground on weekends and nights, Mr. Emanuel tells Crain's. The goal has been “to give Garry the resources when he needed them, at the place he needed them,” he says. “And that's what we've done.”

FINANCE

Mr. Emanuel never has blamed Mr. Daley by name for the financial mess he inherited. But that mess—high costs, soaring debt, quickly vanishing reserves—remains real.

Spending growth has slowed, with the number of full-time city employees cut 8 percent to 34,125 this year from 36,970 in 2010. Cost per employee is up a modest 2.3 percent through 2013, to $94,551, after soaring during Mr. Daley's last two terms. Similarly, appropriations in the city's corporate fund, or operating account, dropped slightly between 2010 and 2013 before rising a bit this year. Over the past four years, the city budget has increased nearly 3 percent, to $3.23 billion.

Mr. Emanuel seems most proud of his decision to stop drawing down city reserves. “We used to balance our operating budget raiding the rainy day fund,” he says. “We've put $45 million back into the rainy day fund.”

He has shown less restraint when it comes to debt, however. Effectively, Mr. Emanuel has taken pressure off the city operating account by paying expenses with borrowed money that will not come due until long after he's out of office. As a result, the city's general obligation debt—the total amount taxpayers are on the hook to pay in principal and interest—has risen 11.7 percent in four years, to $14.70 billion, including borrowings in 2014. By a different measure, counting just what needs to be paid between now and 2041, it has leapt an eye-catching 22.6 percent. (Until this year, the city did not have debt due past 2041.)

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City Chief Financial Officer Lois Scott (pictured at right) responds that while debt is rising, it's doing so at only half the rate of Mr. Daley's last three years in office. That's true. Still, it has to be paid back even if current interest rates are low, and the Emanuel administration has worsened the situation by rolling over existing debt and deferring it far into the future, a practice known as “scoop and toss,” says Laurence Msall, president of the Civic Federation, a government watchdog group in Chicago. His bottom line: “The city has made some improvement in its debt management. But it's far from stabilized.”

For example, instead of paying off $120.8 million in bonds as scheduled in 2015, Mr. Emanuel refinanced them last year at an additional total interest cost of $228.8 million over 30 years, according to a Nov. 3 report by the federation.

PENSIONS

Also far from stabilized are the city's four employee pension funds, which as of fiscal 2013 had a collective unfunded liability of $20.15 billion, up 38 percent from $14.59 billion in 2010. But though it's been a struggle, the mayor has scored some real victories.

The biggest came this year, when employee groups, following the lead of Chicago Park District workers, signed off on a plan to refinance the pension systems for city laborers and most white-collar workers. There will be a cost: The city is raising taxes on phone service by an estimated $50 million per year to fund its share of the deal and will have to find an additional $50 million a year for each of the next four years, possibly from higher property taxes. But workers will share the pain in the form of reduced benefits, and a huge liability will be removed from the city's books.

That assumes, however, that the plan survives an expected court challenge. Still to be done are more difficult deals covering retirement plans for police, firefighters and public school teachers.

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Chicago Teachers Union President Karen Lewis speaks to an estimated 25,000 striking Chicago teachers and their supporters during a rally at Union Park in 2012. Thinkstock photo

SCHOOLS

Mr. Emanuel probably has invested more political capital in improving Chicago Public Schools than in any other initiative, suffering through a seven-day teachers strike and taking the heat for shuttering 50 schools in 2013, almost all in minority neighborhoods. He says he has no regrets: “I know what we've done is actually improving lives.”

CPS now has both a longer school day and school year. Mr. Emanuel says twice as many kindergarteners are prepared for schoolwork thanks to expanded early education. Even better, the University of Chicago's Consortium on School Research confirms significant improvements in high school graduation rates, with twice as much improvement since 2010 as the entire preceding decade and 69.4 percent of freshmen collecting their diploma within five years.

The bulk of the credit doesn't go to Mr. Emanuel, though, consortium Director Elaine Allensworth says. Instead, she says, it stems from decisions made by previous officials to closely monitor ninth-graders, particularly African-American boys, to ensure they stay on track for graduation.

Mr. Emanuel's first schools superintendent, Jean-Claude Brizard, agrees. “Pushing that research to policy has made all of the difference in Chicago,” he says. “Paul (Vallas), Arne (Duncan) and Ron (Huberman) deserve credit for pushing, and this administration was smart enough to understand the significance,” he adds, referring to three predecessors who served under Mr. Daley.

HIS 'BIGGEST CHALLENGE'

If this mayor is to continue to make structural reform, aka tough decisions, he'll need to be at the top of his political game. And that likely means not only no more bragging about unfinished jobs—remember the Port of Chicago turnaround?—but connecting better with average Chicagoans.

Mr. Emanuel, who served a president and made a fortune in the private-equity business, has a different image than predecessors Mr. Daley, Eugene Sawyer and Harold Washington, Chicago political consultant Thom Serafin says.

“With Daley and Sawyer and Washington, you had an indigenous sense that they were from the city,” Mr. Serafin says. The mayor “has to be a Chicagoan. He can't be Hollywood or D.C. He has to be like everybody else here. We struggle with the winter and get mad when the Cubs don't do well.”

Says a mayoral associate who asks not to be named, “A lot of people respect him. But at some point, it catches up to you that people think of you as arrogant and distant.”

Making Chicago one city would test anyone, Mr. Emanuel acknowledges. “The biggest thing I haven't moved far enough is to make sure that the benefits that are occurring in the 'the city' are enjoyed by everyone in the city.”

Mr. Emanuel's support for raising the minimum wage to $13 an hour is a step in the right direction, says Ald. Roderick Sawyer, of the South Side's 6th Ward, son of Eugene Sawyer. “This will be his biggest challenge, if he could focus some attention to the underserved neighborhoods.”

Says Mr. Emanuel, “That's a challenge that's bigger than one term could ever, ever handle.” Chicago's Energizer bunny of a mayor says he's working on it. But he wants more time.